Effectiveness and ffficiency of FSC and PEFC forest certifications on pilot areas in

1. Effectiveness and ffficiency of FSC and PEFC forest certifications on pilot areas in Nordic countries

2. Effectiveness and efficiency of forest certification • Table of Content • Study objectives • Pilot areas and assessed standards • Ownership of certified forests • Study approach • Effectiveness and efficiency (definitions) • General remarks • Performance requirements of FSC and PEFC forest certification on • Envronmental values • Social sustainability • Economic sustainability • Certification costs • Effectiveness and efficiency of PEFC and FSC certification • Essential elements for the participation of private forest owners • FSC and PEFC certification among private forest owners

3. Study objectives • Analyse the impact of certification on sustainable forest management taking into account the particular conditions prevailing in each pilot country • Evaluate effectiveness and cost-efficiency of FSC and PEFC based certification schemes in the pilot countries • Analyse factors encouraging private forest owners to opt for forest certification

4. Pilot areas and assessed standards • Pirkanmaa region, Finland • PEFC: Finnish Forest Certification System (FFCS): SMS 1002-1 (1998) • FSC: Finnish Draft for FSC Standard (2004) • Gävleborg County, Sweden • PEFC: Standard for PEFC Sweden (2000) • FSC: Swedish FSC standard (2000) • Adger-Telemark, Norway • PEFC: Living Forest Standard (2000) • SGS Qualifor Programme interim local FSC standard (2001)

5. Ownership of certified forests Pirkanmaa, Finland Gävleborg, Sweden Adger-Telemark, Norway • In Pirkanmaa and Adger-Telemark practically only PEFC certified forests • All forests of non-industrial private forest owners are exclusively PEFC certified • Double certification (FSC and PEFC) common in Swedish forest industry

6. Study approach • The assessment of effectiveness and efficiency of the implementation of each standard was based on: • breakdown of the forest areas certified under the different schemes • analysis of performance requirements in PEFC and FSC certified forest management • impact of forest certification in promoting sustainable forest management • participation of private non-industrial forest onwers in certification

7. Effectiveness and efficiency • Effectiveness • quality (contribution to SFM through standard requirements) • quantity (extent of certified forests) • Efficiency • benefits (market benefits, improved SFM, etc.) • costs (organizational costs, auditing costs, loss of stumpage revenues, etc.)

8. General remarks • Certification has levelled out differences between Nordic countries independent of the requirements imposed by national legislation • FSC standards are more detailed and repeat requirements already imposed by legislation (predetemined standard structure) • All standards emphasize environmental aspects and have made them an integral part of certified forest management • All standard comparisons should take into consideration the statutory framework and national systems for forest management • Practical differencies between PEFC and FSC based forestry are small • PEFC and FSC based forest certifications enhanced forest management in pilot areas

9. Performance requirements of FSC and PEFC forest certification (1) • Environmental values • PEFC and FSC based standards protect valuable habitats, water ecosystems and increase decaying wood in forests • FSC requires a minimum blanket 5% share of set-aside areas regardless the size of a FMU or precense of valuable sites • PEFC requires preservation of all sites deemed valuable at a national level regardless of their share • The share of set-aside areas varied from 1 to 15% between forest types and standards • At a regional level the set-aside areas in PEFC and FSC certification reach a comparable level, whereas in a FMU the difference is larger • In large-scale forestry the set-aside areas can provide higher protection values than in small-scale forestry, also cost implications tend to be higher in small FMUs than in large-scale forestry

10. Performance requirements of FSC and PEFC forest certification (2) • Social sustainability • In Nordic countries main concern is to maintain forest-related employment opportunities in • forestry and forest industry • recreation and turism • non-wood products and traditional livelyhoods • On recreational use of forests neither PEFC or FSC standard add to the common law on free access to forests recognized in all Nordic countries • Forest certification has broadened the scope of socially sustainable forest management

11. Performance requirements of FSC and PEFC forest certification (3) • Economic sustainability • Long-term economic sustainability of forestry in small and larger FMUs is the baseline for forest certification • Requirements are often general compared to those on environment • Only few criteria promote active wood production (regeneration is well covered) • Set-aside areas and other harvesting restrictions increase significantly the long-term losses in stumpage revenues compared to the normative level, which decreases the options reach economic profitability in forestry • Through set-aside areas forest owners make a significant long-term environmental investment. FSC certification tends to require higher investment but PEFC certification has led to similar levels of set-aside areas e.g in Sweden and Norway • The investment has not brought sufficient economic benefits to forest owners

12. Certification costs • Reliable data on certification costs was not recorded by certified organisation • In large group certification the direct audit costs (internal and external) become marginal (only 0.4-5% of total costs) • Losses of stumpage revenues cover 50 to 99% of the total costs • Indicative estimates for the cost implications of forest certification varied in • PEFC certification between 1.4 – 2.5 – 13.6 EUR/ha • FSC certification between 2.6 – 13.6 –19.1 EUR/ha • Incremental costs of double certification were marginal due to joint auditing procedures for the PEFC and FSC standards

13. Effectiveness Determined by the extent of certified area; overrules the minor differences in performance requirements PEFC certification more effective in Finland and Norway (private non-industrial forest owners) In Gävleborg, Sweden FSC certification dominated till 2004. Through double certification and harmonisation of the PEFC and FSC standards both schemes are effective in promotion of SFM in Sweden. Efficiency Benefits include (i) improved management in forestry organisations, (ii) integration of environmental and social aspects, (iii) improved market communication and (iv) improved public image PEFC certification has been successful in (i), (ii), (iii) FSC in (i) – (iv) FSC is more expensive especially for private non-industrial forest owners Effectiveness and efficiency of PEFC and FSC certification

14. Essential elements for the participation of private non-industrial forest owners • Full commitment of forest owners’ organisations that inform and justify the benefits and responsibilities related to certification • Efficient group certification arrangements organized by forest owners’ organisation • low threshold for participation (in connection with timber sales or other routine activity) • trust that the group promotes forest owners’ interests • Market demand for certified timber increases forest owners’ participation significantly • access to markets (traders trade only certified timber) • positive price premiums: higher price for certified timber • negative price premiums: lower price for uncertified timber • Market demands justify the investments made in promotion and implementation of forest certification

15. FSC and PEFC certification among private non-industrial forest owners • Forest certification deemed an essential element in providing assurance on SFM (environmental) • PEFC certification supported by the Nordic forest owners’ organizations has gained ground in private non-industrial forestry • FSC does not have efficient group certification arrangements supported by forest owners’ organisations, resulting low popularity in non-industrial private forestry • Forest owners are willing to make a written commitment in joining group certification (required in Sweden and Norway) • Threshold for individual certification in FSC or PEFC is too high • FSC standard with blanket 5% threshold for set-aside areas requires, in average, higher environmental investments from small-scale forest owners than national PEFC standards